As New York City Real Estate Tech Week kicked off last week, the message was loud and clear from the outset – the North American tech set is eyeing Europe now more than ever before.
From US start-ups looking to expand overseas to venture capitalists identifying their next targets, opportunities across the Atlantic have well and truly caught their attention.
“Markets are local but technology breaks down a lot of these barriers,” says Dan Hughes, director and proptech lead at the RICS.
“And it is noticeable that US-based firms, both property companies and VCs, are becoming increasingly interested in technology from the rest of the world, particularly Europe.”
Despite political uncertainty in the UK, American entrepreneurs and investors do not appear to have been put off, with London regularly topping their hit lists.
As VC investor Rob Kniaz of Hoxton Ventures said at EG’s Tech Talk Live event in September: “Brexit be dammed.”
But just how serious is this commitment to support European tech? And what emerging trends in the States should British companies from both sides of the proptech equation be keeping an eye on? EG caught up with four of the biggest players in New York real estate tech to find out more.
The digital dude
Adam Stanley, chief digital officer and chief information officer, Cushman & Wakefield
“One of the most fascinating parts of my job is watching the New York and London real estate markets develop and grow off the back of digital disruption. These two cities are the apex of the global commercial real estate sector.
“New York is our number one market, London is number two and we are seeing major innovation in real estate tech in both. New York remains the crux when it comes to the majority of the investment for now, but we are increasingly seeing London and other European cities emerge as huge hot beds of innovation.
“New York is a massive market but it is often the small, agile, nimble ways of thinking that we are noticing in Europe that really unlock the cool stuff.
“I keep a close eye on that because part of my job is making sure we don’t miss the future. On a wider scale, I think that’s a challenge a lot of businesses are facing at the moment – people are so scared of change for fear of losing their jobs, the future will pass them by. You can’t have job preservation and embrace digital disruption at the same time.
“What I can do is say to the brokers here – and I call myself the digital dude because I love talking to them about this stuff – is this: ‘Your job may be fundamentally different in five years’ time than it is now, and if you can’t articulate why you are uniquely qualified to provide advice, it will be difficult for you to remain productive. If you are doing something and what you are doing doesn’t require you to think, you are wasting your time.’
“A digital future doesn’t mean that all of the jobs people are doing now will disappear. It just means they will need to evolve.
“For brokers in the future, it won’t be so much about the transaction but rather how well you know the neighbourhood and how well you understand the space, and how that impacts on employees.
“You need to actually take all of the data and all of the knowledge you have and apply that to client questions and answer them properly.
“Real estate is the number one cost for most of our clients, yet they have only really spent time optimising rent and reducing the cost of the lease.
“Now we need to start looking at that whole physical asset and think of it more as a digital one.
“I have only been working in real estate for four years after spending most of my career in financial services – banking and insurance. These sectors went through disruption periods years ago so I have past experience and, to me, real estate is at an intersection right now and is on the cusp of becoming a completely different industry to the one it used to be.
“It is exciting. But there is a danger some people will underestimate how much the sector is going to change. Underestimating disruption doesn’t happen because people aren’t smart. They just need to understand they can’t have job protection at the same time.”
Click here to listen to the full interview with Stanley
The connectors
Arie Barendrecht, chief executive, and Philip Kanfer, director of business development of connectivity at ratings firm Wiredscore
Kanfer: “When we launched Wiredscore here in the US with Mayor Bloomberg, we focussed on New York for the first year. It made sense because this is a 500m sq ft market. We spent a lot of time talking to and educating two sides of the real estate ecosystem – the occupiers and the brokers – on connectivity.
“Now we have certified 160m sq ft of space in the city and have been expanding in the US east to west.
“But we have also been drawn over to the UK. We launched in London in Q4 of 2015, which allowed us to spread our wings in Europe. And now the goal is to continue to expand and grow in major markets around the world, not just those in North America.
“We have also spent a lot of time looking at how we can improve what we offer. At the start, Wiredscore was very much just a ratings system. Over time, we have seen an opportunity to offer that certification as a service. So now clients and landlords can call us to ask any telecom questions that they or their clients might have. Those add-ons and that level of service and interaction with the people we work with is arguably even more meaningful than the ratings service itself.”
Arie: “We started off on this quest around four years ago. We were the original William Newton and Tom Redmayne [Wiredscore’s chief executive and business development director here in the UK] and now our aim is to be the international standard for connectivity in office buildings.
“When any business or tenant is looking for office space, they can use us to prioritise buildings that offer superior connectivity. We have this happening already across the US, the UK, France, Germany, Ireland and soon in Canada, but the ultimate goal is to create a brand that allows the global occupier to do this across Asia, Africa and the rest of the world.
“Since we launched, connectivity has really gone to the top of the agenda for occupiers and landlords, but also investors.
“Clients here contact us all the time when they are putting together their sales decks to pitch a building for sale because now they always include a page on connectivity.
“The reason they do that is to tell potential buyers that particular building is protected form physical obsolescence. It won’t, for example, require a loads of work and investment to fix the telecoms infrastructure in a few year’s time. It gives potential buyers a look under the hood of the car to see what is not readily visible when they are touring the space, but is one of the most important things.
“As for what is next for us, we will continue our global expansion in 2018 and beyond.”
Click here to listen to the full interview with Kanfer and Barendrecht
The work/life integrator
Ryan Simonetti, chief executive and co-founder of US-based workplace as a service platform Convene
“Space as a service is agnostic to sectors. You see it in retail, in hospitality and now in offices. Convene, which has been up and running for nine years, offers workplace as a service and partners with the largest global landlords including Brookfield and Blackstone to help them operate their office buildings more like a full service hotel.
“It is about lifestyle as well as workspace, so we build in events space, meeting space, co-working facilities and hotel-level amenities when it comes to the sorts of food and drink on offer.
“Ultimately, the future of the office is not all about co-working, but rather the cosumerisation of the real estate experience. Convene is hospitality combined with the traditional office building, but it offers something that moves away from the tenant to focus on the individual, because these are the people who can now choose how, when and where they work.
“Co-working is a piece of that, but it’s the headline. The trend line is what is offered across the board from a design and tech perspective, to the snacks – and we have a strong snack game here – to the offers and events spaces.
“The millennial generation, which now dominates the workforce and will make up 70% by 2025 or 2030, values purpose above all else. I would argue that most of us go into offices every day that don’t inspire us. So to be able to design a physical space where there is a human-to-human experience rooted in hospitality creates soul. And I think we are all craving that.
“Office spaces have to be designed empathetically. They have to make people feel good. Because how much time do we spend in offices? It’s a huge chunk of our lives. Work/life balance has been replaced by work/life integration as we are all looking to make the best use of our time.
“The same trends are playing out globally but different regions are leading on different things. From a space-as-a-service perspective, London is much more advanced than New York or Asia, but I think North America will lead on the tech and certain parts of Europe will lead on design.
“In future we need to be in London and Asia. We will be a global company within the next 24 months and London is near and dear to our hearts. From a space perspective we will want to find the landlords committed to creating an experience for the end user that is different and deeply empathetic. It is less about location and more about partner.”
